Everyone knows when it comes to investing, leading with your emotions is a recipe for disaster. So why do so many people continue letting their emotions sway their investment decisions?

At TradeStops, our single-minded focus is to help individual investors become better investors by removing emotions from the investment equation.

Our Volatility Quotient (VQ) is designed to help you understand what the normal volatility is for each stock and each fund.

The Stock State Indicators (SSI) give you a simple green/yellow/red system for understanding the current condition of every stock and fund.

The portfolio-level tools, Asset Allocation and Portfolio Volatility Quotient (PVQ), allow you to see the “big picture” of your investments and understand how the individual components that make up your portfolio are correlated.

The Risk Rebalancer allows you to easily restructure your portfolio so that you’re taking the optimal amount of risk in each position to potentially maximize the return of your portfolio.

But we’ve never had a tool that puts everything together at the click of a button.

Until now.

The Pure Quant tool that we released at the Lifetime membership level a couple of weeks ago does all of that. And it’s easy to understand and implement.

The Pure Quant Tool is accessible through the “Research” tab at the top of the page and then clicking on the “Pure Quant” tool itself. Open it up and this is what you’ll see.

Volatile Stocks

You can create your own Pure Quant portfolio in three easy steps.
    1. Add the sources that the tool is going to use as its universe of stocks. In this case, we created Watch portfolios for all 14 of the billionaires we follow in the Billionaire’s Club (also available for our Lifetime members).


I’ve added all of these Watch portfolios in the Pure Quant tool.
    1. Next, we’re going to set up a portfolio using an initial investment amount of $100,000 divided into 20 investments.

  1. Then we just click the “Run Research” button and TradeStops does the rest.

Here are some of the positions in the portfolio.


Let’s look inside the Pure Quant tool. Here are the rules that determine the stocks that are included in the new portfolio.
  1. Remove all stocks with a Red, Yellow, or Gray SSI signal (only use stocks that are in the SSI Green Zone)
  2. Remove all stocks that have a 30-year historical VQ of greater than 40%
  3. If the list of stocks is from the Billionaire’s club or the Newsletter editors, remove all stocks that are trading at a loss since the SSI Entry signal
  4. If the list of stocks is from Watch lists, remove all stocks that are trading at a loss since the SSI Entry signal was triggered
  5. Sort the stocks by the number of days that they have been in the current SSI state (Green Zone) with the smallest number of days at the top of the list
  6. Choose the x number of stocks that you want in your portfolio and put them in the Risk Rebalancer

When a stock hits its SSI Stop signal, sell the stock immediately. At the beginning of the next month, determine how many stocks are to be replaced, re-run the Pure Quant tool, replace the open positions with the stocks at the top of the list, and run the entire portfolio through the Risk Rebalancer.

Rules-based investing from TradeStops. Algorithmically developed, Pure Quant. Don’t let your emotions turn your investments into losers.

Tom Meyer